WTO

The primary purpose of the WTO is

to open trade for the benefit of all.
• the WTO’s system comes from the 1986–94
negotiations called the Uruguay Round

• As well as earlier negotiations under the General

Agreement on Tariffs and Trade (GATT).

• The WTO is currently the host to new

negotiations, under the ‘Doha Development
Agenda’ launched in 2001.
The World Trade Organization (WTO)
• An intergovernmental organization
• The WTO officially commenced on 1 January
1995 under the Marrakesh Agreement
– signed by 124 nations on 15 April 1994
– Replacing the General Agreement on Tariffs and Trade
(GATT)
• Regulates international trade between nations.
• It is the largest international economic
organization in the world
 the World Trade Organization
• It is an organization for trade opening.
• A forum for governments to negotiate trade
agreements.
• A place for them to settle trade disputes.
• It operates a system of trade rules.
• a place where member governments try to
sort out the trade problems
• 164 members
 WTO-Functions
• Decisions in the WTO are typically taken by
consensus among all members and they are
ratified by members’ parliaments.
• Trade frictions are reduced through WTO’s
dispute settlement process
• lowering trade barriers through negotiations
• the multilateral trading system – are the WTO’s
agreements
– guarantee WTO members important trade rights
– Provide a stable and transparent framework
– to improve the welfare of the peoples of the WTO’s
members
 WTO-Principles
1.Trade without discrimination
– treating other people equally
– countries cannot normally discriminate.
– Most-favoured-nation (MFN):Grant someone a special
favour (such as a lower customs duty rate for one of their products)
– and you have to do the same for all other WTO
members.
– It governs trade in goods
– National treatment: Treating imported and locally-
produced goods equally
2. Free trade: gradually, through negotiations
3.Predictability and trade transparency
4.Promoting fair competition
5. Encouraging development and economic
reform
 Challenges
• Rising regional economic and trade blocks
– EU
– ASEAN
– NAFTA
– ECO
• US-China Trade war
• Trump’s protectionist policies and WTO principles
• Global financial/economic crisis of 2008 and
protectionism on the rise
• Dominance by the developed countries
 the Doha Development Round-the biggest challenge

• The most obvious challenge is that the Doha Development

– to further liberalize trade and reform the WTO.
– After a decade of talks, it still remains to be concluded.
– The Doha Round is focused on reducing important trade barriers
in sectors, such as agriculture, industrial goods and services.
– This would encourage businesses around the world to specialize
in the production of
• goods and services,
• achieve economies of scale, and
• increase their efficiency and productivity,
– it would allow them to deliver improved and cheaper products
to global consumers.
– The developing countries have some reservations
– the Doha Round is particularly focused on providing increased
market access to goods and services from developing countries
 The Future of WTO
• WTO vs Regional Trade/Economic Blocks

• Technology will shape the future of trade and currency as we know

it since millennia

• Digitalization of goods, services and currency

• WTO may need new laws, agreements and mechanisms to regulate

int. trade

• Rise of China and BRI may challenge WTO’s western dominance

• Shift from trade liberalization to protectionism

• Rising economic and business costs in the member countries